Friday, August 24, 2012

This morning, Sam Cooper of The Province took me up on my offer to do a walkabout in the Olympic Village to see and hear firsthand my suggestions to enhance the marketing program now underway in the community.

While some of these items have been addressed, unfortunately many have not. The following are some of the things noted and discussed during this morning's walkabout.

Entry to the neighourhood along Columbia
For many potential buyers, their first approach to the community by car or the Canada Line is along Columbia Street. This is what they find.If they walk further along Columbia Street, this is what they see. It doesn't, in my opinion create a positive impression.

Signage
Why do residents have to stick paper signs with their suite numbers on windows? Surely the developer can offer coordinated stick on numbers or maybe even something better. Again, this detracts from the attractiveness of the project.Similarly, rather than allow people to stick signs on building facades, why not install some community notice boards? This is a sign of bad management

Parking
If the potential buyers are driving, which is likely the case for many, they will have a hard time finding a place to park. Both the photographer and I had this problem at 10 am on a Friday morning, even though the Sales Centre was closed. All the on-street parking was either being used, or restricted. After driving around a couple of times, the photographer directed me to the underground parking he had discovered by chance. After some difficulty finding the pay station, I read it was broken with this sign stuck to it. Surely while we are encouraging customers to come to the new commercial operations, or visitors to the Presentation Centre, the City should reconsider its decision to charge for parking. Instead of this sign, how about a sign saying 'Free Parking: Thank You for visiting and supporting our neighbourhood'?

I would also again recommend that the large gravel area along First Avenue near the Sales Centre be converted to Sales Centre parking. (The City Manager and Jeff Lee will recall I got quite upset two years ago when I learned the city was towing the cars of potential buyers from this area!)

Town square maintenanceWalking around the Town Square potential buyers are attracted to the views and yes...the large birds. But they can't help but noticed cigarette butts and dirt underneath these often photographed birds and elsewhere throughout the Square. Surely it would be a simple thing to sweep the area on a regular basis. And yes, remove the weeds growing through the pavers and around the benches.

Speaking of seating, I would remove the awflul yellow benches and replace them with something simple. They are ugly, collect water and graffiti and detract from what is a very nice space.
I would again suggest that the large green electrical transformers be wrapped in graphics as they often are elsewhere in the region. Perhaps the graphics could inform visitors that OV has been awarded LEED Platinum status. Put the logo on one of the boxes, along with other good news stories. And reconsider my old idea to put some food carts in the square to animate it, and provide additional amenity for visitors and potential buyers.Outside the Presentation Centre Again, everyone who has ever sold real estate knows you do what you can to improve the appearance of the product whether it be a house or a neighbourhood. While I am the first to admit we often overlook things that we see every day, I can't understand why steps away from the Presentation Centre the public boulevards must look like this.

Building entriesDecades ago, Andre Molnar taught many of us the value in dressing up entries, often by simply adding flowers around the front door. I thought of this as I walked by the oftentimes barren apartment building entrances throughout the community. They are just not inviting and could benefit from some attractive planters or other measures.

(At SFU's UniverCity, inspired by Molnar and other community developers, during the early stages of neighbourhood marketing, we placed crates of fresh fruit and vegetables outside the corner store to enhance the look of the mixed use Cornerstone Building. (The operator of the store refused since he maintained the produce kept getting stolen or rotten before sale!) You do what you can!)

The social housing
Over the past few years, there has been much discussion about the social housing at the Olympic Village. Given the potential financial losses that I estimated the City would incur many years ago, I advocated the sale of 126 social housing and related 126 market rental housing units as affordable housing. The city decided against this idea. When I was subsequently told the Portland Hotel Society might manage the social housing, I publicly stated that 'hard to house' people would detract from the marketablilty of this neighbourhood.While some tried to discredit me by suggesting I was opposed to mixed income communities, this was not the case at all. The fact is, neither the Portland Hotel Society nor any other non-profit organization was selected to manage these units. Instead a cooperative housing organization is managing the buildings on a special arrangment. I raise this point since I wondered this morning what is happening to a barren grassed area outside the social/rental housing units. It looks quite sad at the moment. Is there supposed to be play equipment installed? Is it intended for some other purpose? To my mind it certainly doesn't add to the neighbourhood. (NOTE: I have subsequently been told that this is a City park, not part of the social housing. It was intended that a large piece of industrial equipment be installed to celebrate the area's industrial past, but this is on hold for financial reasons.)

Two other buyers' concerns
I don't know if the marketing team has done any exit surveys, (if not, I think they should), but from my discussions with many potential buyers, two factors are affecting their potential purchasing decisions. They are:
a) concerns about building
construction quality and deficiencies; and b) the long term performance and operating costs of the various
sustainability features.

I am told by the project publicist that these problems have both been
worked out. If this is the case, there is still a need to share and promote this information. I would suggest that highly respected third parties be asked to inspect and investigate and provide independent reports to offset these concerns. Otherwise I maintain some price adjustments may be required for some of the units, especially as the neighbouring buildings are completed and more units come back to market in this emerging part of the city.

In conclusion,
I recognize that the look and upkeep of a neighbourhood is just one factor in any potential buyer's decision. But it is a factor that could be relatively easy to address. As I believe these photos demonstrate, the Olympic Village neighbourhood needs more attention to its grounds.

There is also a need to address the oftentimes mentioned concerns about construction quality and sustainability features.

However, the neighbourhood is now greatly enhanced by Urban Fare,Terra Breads and Daniel Frankel's new wine bar. People are enjoying the outdoor patios and while the Square is occasionally used, it should be animated much more than it is, especially in the fall. The drugstore will soon be opening bringing more people into the neighbourhood and one day the Salt Building will be occupied. (I still maintain additional signage or graphics should be added to this building so that people know what might be coming.)

While the Olympic Village is intended to be a sustainable walkable community (and I compliment the city on the audio tour), parking is becoming a significant problem that needs to be addressed in a much better fashion than it is right now. Otherwise, I maintain this will affect traffic to the Presentation Centre and sales performance.

As an architect/planner/developer who has been involved with a number of large scale communities including the original phases of the South Shore of False Creek, Bayshore and SFU's UniverCity; and as a taxpayer and proud Vancouverite, I want to see this neighbourhood succeed. It has a lot going for it, but some things are being neglected, years after they were first pointed out. This is no doubt contributing to my frustration. More importantly, they are contributing to what I consider a less than stellar sales performance.

But I hope that I can now stop writing about the Olympic Village; and if I write about it two years from now, it will be to point out what a complete and happy neighbourhood it has become, and how the next phases of South East False Creek are being creatively planned.

I hope these observations will be helpful to the team responsible for
the project. If I'm off base, I invite readers or those involved to tell
me (publicly or privately) and I'll happily respond.

Wednesday, August 22, 2012

This week the Olympic Village was back in the news as a result of the release of another report by the Receiver, leading to a story by Frances Bula in the Globe and Mail. She also posted a blog entry on the topic which attracted a few comments.

If I had any sense, I'd do what Bob Rennie asked me to do and 'put a sock in it'. But I don't think the team responsible for the marketing of the Olympic Village is doing everything it can to sell out the community, and feel compelled to share my views in what I hope will be seen as a positive gesture.

The following are comments I posted on Frances' site.

I am pleased the village is coming to life and I know that many
people who have bought there are very happy with their purchases. I
encouraged some people to buy since they were buying penthouses and very
prime units at prices well below the original prices and below what
they would have to pay in Coal Harbour, or other waterfront locations.

I think the OV and other False Creek developments have the potential to be much better neighbourhoods than Coal Harbour. South East False Creek will be a wonderful neighbourhood one day.

That being said, I remain concerned about the city’s financial
picture. Frances, you said the sales are happening faster than anyone
expected. This simply is not true.

With respect to Jesse’s comment that the previous $462MM outstanding debt included the outstanding land payment, my understanding is that the
$462MM debt does NOT include any of the outstanding land payment. The
outstanding land payment is regarded by the receiver and the City as an ‘aspirational
payment’ in the order of $173MM and is never going to be repaid. But it is not a loss :-)

This would not be a problem if the money was all ‘profit’to the city, but my
understanding is that most if not all of this amount has been spent on the
infrastructure, including theshoreline, the environmental features, the community centre, etc. Indeed, many items
were upgraded in anticipation of this big land payment.

Now there’s no use crying over spilled milk…this is not the fault of
any one person or any one political party…but I do think the city should
be doing everything it can to sell the remaining units (especially the
less attractive units) in the not too distant future for a number of
reasons.

Firstly, there are still unsold units in surrounding buildings that
are nearing completion, and many of the units Rennie Marketing and other
developers/marketing firms sold in neighbouring buildings will soon
start coming back onto the market. Why?

Because they were purchased by investors who now realize that they
are not going to realize the capital gains they hoped for, and they may
not even get the rents they were hoping for.

While these units do not have the sustainability ‘bells and whistles’
nor the cache of the Olympic Village, they are going to be real
competition and appeal to many potential OV buyers.

I fear these resales, and the unsold units will be coming onto the market at prices below the current OV prices.

To address this competition, I would urge the City to be creative
with some financing programs….I know….I’ve made the same suggestions
before…but the City can offer financing programs that other developers
or investors can’t offer. Maybe it is time to consider shared equity,
silent second mortgages, and other forms of fettered ownership to move
these units, without having to significantly reduce the prices.
That being said, I believe the market is telling us that while the
better units are very well priced…perhaps under-priced in some
cases….many of the less attractive units with awkward layouts are over
priced.

I know the City and marketing team will be furious with me for saying
this, but I think it must be said. I’m happy to back up my allegations
and know that many other real estate consultants and developers agree
with me.

So the City should reduce some prices now to to sell units rather
than hold onto them for maybe years. Altho the City’s borrowing rate is
very low, there are holding costs, and the city is not even getting
property taxes. Furthermore, empty units lead to other problems.

On a different matter, I also feel that the City is not doing
everything it can to show off the area. The town square is looking
tired…there are weeds growing through the pavers…the banners are
starting to fade…the electrical boxes that I was assured would be
covered with colourful murals are now a dull, faded green. There’s no
excuse for not doing something creative here.

The benches with the awful yellow/white sitting surfaces appear
discoloured and some are covered in graffiti…whoever designed these
should be shot…they’re just awful!

As you walk down the streets many of the hedges in front of unsold
units need trimming…they look wild and unkempt…other plantings are dying
and not being tended to…and there are weeds and garbage piling up.
Do these things discourage people from buying…it’s hard to say…but all of these things do affect how the area is perceived. I personally think it is important that the area look as well maintained and attractive as possible.

Moreover, I just don’t understand why this is being allowed to
happen. The receiver has been paid $4.2MM according to Frances’ story.
For this money his team should be pulling out the weeds.

Finally, more effort should be made to let people know what’s coming
to the remaining empty spaces. While some do have colourful signage,
many do not. In Ireland, where they have lots of empty storefronts, a
company has created clever murals that give a visual illusion of what
the empty space would look like if it was tenanted.

This would be appropriate for the Salt building which today is an
empty box. I’m told something is coming, but it’s not apparent to a
visitor…at least it wasn’t apparent to me when I was there last Tuesday.
So I apologize for the negative tone, but hope these comments will
perhaps draw the attention of those in positions of influence. I and
other real estate consultants and marketing consultants I know would be
happy to walk through the project with the Receiver or City staff or the
marketing team to point out the things we think should be addressed in
order to accelerate the sales program.

I think it is important that the remaining units be sold in a timely
fashion, because if they are not, I worry that the City many may be
tempted be simply rent out more units, especially after the HST is
withdrawn.
While this will have the affect of filling the project and allow
planning for other phases to progress, it will also mean a much bigger
financial hit. I understand the city has already taken the Receiver’s
advice and rented out some of the condos…but this is a very expensive
way to work out of the problem.

As a taxpayer, I would not like to see the city rent out any more units.

Many of the readers of Frances' blog seem to confuse, in my opinion, the question of whether developers should pay CAC's, or the amount of the CAC's, with the methods used to determine the amounts. This prompted me to draft the following comment on the Fabula Blog, that I have decided to reprint here.

The key issue to my mind is not whether community amenity
contributions and development cost levies should be collected, or the
amount of the payments…it is how should they be determined?

Right now, in many neighbourhoods in Vancouver and other
municipalities, CAC/DCL’s are clearly set out, based on a determination
of the community needs and the cost of financing growth. They are
generally expressed on a square foot basis and known when a developer
purchases a piece of property. There are some problems with this
approach that need to be resolved, especially when non-profit and
charitable projects must pay the fees, but in principle, I do not object
to this approach.

Where the problem arises, in my opinion, is when the CAC/DCC’s are
not predetermined. Rather they are calculated on a case by case basis,
not based on the cost of providing services or financing growth, but
rather on the ‘value’ of the land before rezoning, and the ‘value’ of
the land after rezoning. Again, this is not happening just in Vancouver.
It is happening in other municipalities that are copying Vancouver.

I am not making this up!

I put value in quotes since it is often a very subjective thing,
especially when a rezoning results in a new form of development, or
development in a new neighbourhood, and there is uncertainty as to what
might happen in the future.

Even the city’s best appraisers will admit that there are many
variables affecting value, both before and after rezoning, and a ‘good’
appraiser can assist the landowner/developer in his negotiations with
the city or a municipality to achieve a lower number.

I am not making this up.

At one time, the city calculated the difference in value or ‘lift’
relying in part on the price paid for the land. Staff requested copies
of Purchase and Sale Agreements. However, this created problems when
sites were purchased at too high a price, as was the case back in the
90′s for a property I rezoned on West 41st. More recently, we witnessed
the phenomenon along Cambie Street where some inexperienced developers
paid much too much for the land not understanding that the city would be
expecting additional payments.
Today staff generally ignore the price paid, or claim to ignore it,
and simply look at ‘appraised value’ before and after rezoning.

The problems with this entire approach are too numerous to list.
However, the net result is that many good developers have decided not to
play the game and have moved their activities to municipalities that
offer greater certainty. (Burnaby, Coquitlam and Richmond come to mind
along with others.) They know it is too difficult to assess a project’s viability when
you don’t know whether you might have to pay millions to the city in
CAC’s based on ‘lift’.

Some developers, who I won’t publicly name, but are well known in the
industry, have managed to determine exactly how to play the game. They
often come forth with a variety of ‘amenities’ that invariably cost
much less to produce than the value ascribed in staff reports, and are
confident enough in their relationships at the Municipal Hall, that they
can buy sites and take chances that others pass on. Invariably they
succeed.

I am not making this up!

Moreover, let me clarify that this happens under all political
jurisdictions….In Vancouver it is not a Vision vs NPA or COPE issue.
Indeed, as most industry insiders know, some developers are equally
adept at working with any administration!

Now, everyone knows that sometimes property values go down as well as
up. They must be wondering what happens in such cases. If the city
calculates a $4M CAC based on certain assumptions and the assumptions
change, does the city give the developer some of his money back? Of
course not!
Although in the past the city has ‘helped’ at least one developer
when faced with such a situation. While this is well known in the
industry, it is not talked about publicly.

No, I am not making this up either.

So…while fixed predetermined CAC/DCL’s may not fully address the
vagaries of the market, along with its ups and downs, this would be a
much fairer system in the minds of most knowledgeable real estate
professionals. Sure, it would result in less work for the appraisers, and less work
and less bonuses for some real estate and development consultants who
often assist developers going through the process. But it would result
in a more certain, equitable development approval process.

And believe it or not, a more certain, equitable and less arbitrary
system would not only benefit the city and developers, it would benefit
neighbourhood organizations and future buyers. But that’s another
story!

Tuesday, August 14, 2012

Recently there has been a lot of discussion about the condition of Vancouver's streets and parks. Many people, myself included, do not think they are as well kept and attractive as they used to be. I have written about this before...Vancouver needs a good spring cleaning....http://gellersworldtravel.blogspot.ca/2009/04/spring-cleaning-for-vancouver.html and there was my recent post regarding the weeds along the False Creek Seawalk.

One of my friends who I greatly admire often tells me that I am too hard on my home town. Vancouver has so much going for it, especially by international standards. He thinks I should refrain from being so critical. He may be right.

But I found myself thinking about the look and feel of Vancouver's streets on my recent trip to Chicago. Why? Well just take a look at these photos taken in their downtown. Now I realize Chicago is a major, world class city, but we want to be a major world class city too....and the greenest city in the world to boot.
So I would like to see us do more to beautify the downtown. We don't have to do as much as Chicago...its urban landscaping has developed and expanded over many years. But perhaps we can start with the Art Gallery forecourt.

Now, as a former Trustee of the VAG, I know the gallery is short of funds, and there is some question whether this space is Provincial or City territory. But surely we can do better than this...I'm frankly embarrassed every time I walk by it...and I'm sure many other Vancouverites are too.

If neither the City nor Province want to spend the money, maybe they can invite some citizens or a corporation to beautify the space in return for short term naming rights...just a thought. I'm sure there are other ideas to improve the area in a cost effective way.

If we can't re-do the front courtyard, surely city staff can do something about this 'planter' on Georgia Street. And the weeds along the street. This is not a question of money...it's a matter of attitude, in my opinion.

To be fair, the City has put hanging baskets along the Granville Street Mall that add to the area, and there are some lovely gardens at Denman and Beach and elsewhere. But compared to Chicago, or Richmond, (just check out No 2 Road and Gilbert for two examples of what a small amount of money and care can accomplish) or Trail BC, we have a long way to go. Perhaps Sadhu Aufochs Johnston, who came from Chicago and is now Vancouver's Deputy City Manager responsible for the Greening of the City, will take this on as one of his projects :-)

Monday, August 6, 2012

It is only 65 miles from Gary Indiana to Lake Bluff
Illinois, but these two communities represent two extremes in contemporary
America that I experienced following a recent trip to Chicago to attend a Board
meeting at the Adler School of Professional Psychology.

I visited Lake Bluff on the suggestion of several Board
members when I told them I was interested in seeing attractive residential
communities in and around Chicago.

I visited Gary since there was absolutely no information whatsoever
about it in any of the brochures we had picked up in the Indiana Tourist Office
and I was curious. Surely this waterfront city had some attractions that would
appeal to a tourist, I thought. I didn’t stay long enough to find out. Driving along Cline Avenue, I was immediately struck by a
parade of abandoned and neglected fast food outletsand other businesses lining the street, as well
as grand old buildings in disrepair. It reminded me of the disturbing images of
Detroit that circulate on the internet; grand old buildings literally rotting,
with weeds growing out of windows, roofs and chimneys.

We stopped at a gas station for directions to the city
centre and the attendant did not seem to understand our request. “Here?” he
asked. “You want to go downtown here!” So we drove on, past a few grand old
apartment buildings that were occupied, but many others that were in total
disrepair.

Eventually we arrived in what was once the downtown, but
most of the large buildings were all abandoned…a museum, the convention centre,
the library, a large multi-story apartment building. Even a grand old church
was in ruins, not unlike the ancient structures we saw in Ireland a month ago. The
only building that seemed looked after was a relatively new baseball
stadium.It was all quite surreal.

Weeds filled vacant lots strewn with old cars. Weeds were growing
through the pavement and sidewalks along both sides of the streets and
collecting garbage.What had happened to
this city? Why was this allowed to happen? Where was the sense of civic pride
that surely once existed in the town?I subsequently did some research only to discover what I suspected.
Gary Indiana, home of the Jackson Five, was once a vibrant town established by US Steel in the early 20th
century. It had a population over 200,000 in the 1950’s with many grand
buildings. However, with the decline of the steel industry the jobs ended and
the population had declined to less than 80,000. The whites fled the city and
at one point it had one of the highest concentrations of African-Americans and
the highest crime rate per capita in America. Grand buildings were left to
decay and then demolished. Today it is regarded as America’s Ghost Town and has
been compared to post evacuation Chernobyl. (I found these haunting interior shots on one of a number of sites on the internet illustrating the desolation of the town.

Will Gary ever recover?The situation seems so hopeless. But even if it does recover, it will
never be as attractive as the small village of Lake Bluff, one and an hour
drive to the north.

If Gary Indiana is representative of the worst of America,
Lake Bluff is the exact opposite. Also set along the shores of Lake Michigan,
it started off as a vacation town for Chicagoans. Today it is a delightful residential
community of about 5700 people that was recently voted by Coastal Living
Magazine as the fourth happiest coastal community in America. Perhaps not
surprisingly, the median income is about three times that of the state of
Illinois, and the median house prices, at around $800,000 are three times the
state average.

One of the first things that struck me was the number of young
children playing in the streets. I was also struck by the variety of
beautifully maintained properties with a mix of old and new houses of various
styles.Many were adorned with American
flags which did not look at all out of place!

As I stopped to take a photograph of a large new house
designed to look like a large old house, I chatted to a local resident out
walking her dog. When I commented on how beautiful the town looked, she proudly
offered to take me to the local museum so that I might learn more about it
history, but feared it might be closed. She mentioned how many of the homes had
started as cottages that were subsequently winterized and converted to
permanent residences. It had been home to the Swifts (of meatpacking fame) and
other notable Chicago families.

The village centre was quite small, but I noticed a real
estate office in a new building designed to look like an old building and
decided to get out of the car and take a look in the window. Although it was
after closing hour, I noticed some people inside so tried the door.I was warmly greeted by the staff who were
enjoying a glass of wine and invited me to join them.I did.It turned out that a nearby restaurant was being featured
that evening on a PBS television show called Check, Please http://www.pbs.org/food/shows/check-please-chicago/
and they were all invited to participate. But first they poured me some wine
and started to tell me about what many consider to be a well-kept secret…Lake
Bluff.

Lake Bluff is the type of community where most of us want to
live. There is a high level of civic pride and it offers both a small town
community feel with access to big city amenities. It also has a significant
recreational component, as evidenced by the number of signs on houses telling
visitors ‘gone to the beach’. While the homes are very attractive and as
previously noted three times the stateprices, at a median price of $800,000 they are well below the price of a
comparable home in Vancouver.Not
surprisingly, the upper-end realtors were astonished when I told them the
prices of Westside Vancouver 33 foot lots, adding that the smallest lot in Lake
Bluff is 50 feet.

Leaving Lake Bluff I travelled through nearby Lake Forest,
another affluent, well-kept community, with perhaps the most impressive high
school buildings I had ever seen. I stopped off at the Deer Path Inn that had
been suggested as a good place to stay. It was like being back in England.The Inn was completed in 1929, a significant
year in American life, and was styled after The Manor House (c. 1453) located
in Chiddingstone, Kent, England.

The nearby town centre of Lake Forest is an attractive
pedestrian area, built around the train station that allows local residents
easy access into the City of Chicago. As I wandered around, I couldn’t help but
think this area represents what so many people work hard to achieve; a friendly
safe clean community with a high level of civic pride. Many of the realtors I
met in nearby Lake Bluff had grown up in the community and chosen to stay
there. Their children had gone to the nearby schools and no doubt many of them
will remain in the area.

I wonder how many of them have ever ventured one and a half
hours south to Gary, Indiana. They would be horrified with the other side of
America.